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Automatic wealth The 6 steps to financial independence - Masreson M.

Masreson M. Automatic wealth The 6 steps to financial independence - Wiley & sons , 2005. - 291 p.
ISBN 0-471-71027
Download (direct link): automaticwealththesixstepsto2005.pdf
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Exactly what your minimum gross rental yield will be likewise depends on your down payment and interest rate and on your local costs for property insurance and taxes.
Local property taxes and insurance can vary significantly. So, depending on where you live and your financial situation, your required minimum gross rental yield may be a few points lower or higher than mine.
But once you determine that number, it becomes very helpful. When you go looking for properties, you can immediately gauge the maximum price you’d be willing to pay on any property . . . then go about trying to get it for less.
After all, it is a minimum gross rental yield we’re talking about. If yours is 10 percent and you pick up a property with a yield of 15 percent, all the better. You’ll start out with healthy positive cash flow from the get-go.
Begin Slowly . . . but as You Become Familiar with the Numbers and See Some Good Returns, Crank It Up!
If you haven’t already begun investing in real estate, start doing so today. If you are a budding real estate tycoon, resolve to add to your empire this year.
You’ll find that actively investing in real estate can give you much-better-than-the-stock-market returns, the comfort of knowing your investments can’t disappear, and a lot of fun fixing up old buildings.
Here’s a promise: If you haven’t ever invested in rental real estate but start this year, you’ll be glad you did. If you keep investing—buying at least one new property a year (which will be easy once you get going)—you will be a real estate multimillionaire when you retire.
220 AUTOMATIC WEALTH
Real estate has been very good to me. Although it would be difficult to say with precision, I'm very sure that my real estate investments have provided me with an average return of well above 25 percent over the years, including the money I lost on the worst investment I ever made (my first investment in real estate) and the two or three real estate limited partnership deals that provided relatively meager (5 percent to 15 percent) returns.
Simply put, my real estate investments alone have made me wealthy. But I never would have had the money to invest in real estate had I not (1) dramatically increased my income by becoming an extremely effective marketer and (2) used that extra income and skill to start a bunch of side businesses.
That's what I'd like to talk to you about now: how to create wealth by investing in small and start-up businesses.
When you look back on all the wealth you acquired, you’ll see that real estate was not only the easiest but also perhaps the most lucrative.
Spend some time today thinking about your financial picture this year and set goals for yourself in terms of real estate investing. Give yourself some time to find a good piece of property or a good deal.
MAKING YOUR FORTUNE IN YOUR SPARE TIME BY GETTING EQUITY IN A BUSINESS
In thinking about this part of the program, I realized something curious about my own career that illustrates an important truth about building wealth.
When I first decided to become wealthy, I was making about $50,000 a year. During the next 12 to 18 months, I boosted it to about $100,000. Since then—and it’s been more than 20 years now—my salary has never gotten much larger than that. Except for a single year with a single company, I have never been guaranteed more than $120,000 a year (or $10,000 a month) by any client or any business
Step 5: Get Richer While You Sleep 221
that I owned or had a stake in. My income has always been very high—but it was profit shares and dividends that brought it into the seven-figure category. In other words, the high income I’ve enjoyed for so many years has been directly dependent on the wealth I’ve been able to generate through small businesses I’ve been part of.
I think this observation is interesting, because it suggests both the limitations of salary-based income goals and the vast potential of equity-generating income. I say “equity-generating” income because profit sharing and/or dividends, over any length of time, are possible only when you have a stake in the business. You don’t need to hold stock. But you do need to be in a position to get a piece of the action.
In other words, to make a lot more than $100,000 a year consistently, you will have to do something more than simply be an excellent employee. Getting equity in a business—whether by getting stock or having a long-term profit-share arrangement—should be a very important part of your wealth-building strategy.
Getting Equity from Your Employer
In Chapter 4, I talked about ways to get your current employer to pay you a radically higher income. I said that if you develop a financially valued skill and put your mind and heart squarely in the center of your company’s profit-making game plan, your chances for making $100,000 to $150,000 a year are good.
But it is also sometimes possible to persuade your business to give you a stake in its equity. If you can do that, the rewards can be much greater than the $100,000 to $150,000 you can get from your salary.
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